Microgen (MCGN) has made further inroads into the insurance market by selling the use of its Aptitude Insurance Calculation Engine to major insurance groups in Europe and Asia. More agreements are in the pipeline, but chief financial officer Philip Wood hopes the related deals will provide further commercial validation. The tool helped boost sales in the software division by nearly a third to £25.4m in the first half, while the ongoing recurring revenue base has grown by 42 per cent to £21.3m.
In the smaller financial systems division, the focus is on trust and fund administration after the post-period-end disposal of the non-core payments business for £6.9m, which will be reflected in the second-half returns. Trust and fund administration sales rose 13 per cent to £6.1m, and now account for 69 per cent of recurring revenues. Mr Wood added that this market is so niche it’s unlikely Microgen will encounter competition from bigger entrants.
Analysts at Investec expect pre-tax profits of £15.4m in 2018, giving EPS of 18p, up from £14m and 17.3p in 2017.
| MICROGEN (MCGN) | ||||
| ORD PRICE: | 389p | MARKET VALUE: | £237m | |
| TOUCH: | 389-391p | 12-MONTH HIGH: | 514p | LOW: 377p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 93p* | NET CASH: | £2.8m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 28.4 | -0.88 | 7.0 | 2.0 |
| 2018 | 34.9 | 6.04 | 7.8 | 2.2 |
| % change | +23 | - | +11 | +10 |
| Ex-div: | 02 Aug | |||
| Payment: | 24 Aug | |||
| *Includes intangible assets of £68m, or 112p a share | ||||
